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Utilise the food mountain to fight rural impoverishment

S.D. Naik

THE Union Minister for Food, Consumer Affairs and Public Distribution, Mr. Shanta Kumar, is faced with an unprecedented situation of glut with the growing wheat mountain with the Food Corporation of India (FCI) and the dwindling off-take from the public distribution system (PDS).

The domestic open market prices have fallen below the PDS prices and the export option is ruled out because the international prices are still lower. This is not the usual case of a supply-demand mismatch but the classic example of the `Paradox of povert y in the midst of plenty'. For there is still widespread poverty in the country, and more so in rural India. Over 30 per cent of the population below the poverty line continues to remain underfed and malnourished.

With the foodgrain stocks held by Government agencies crossing 42 million tonnes -- nearly twice the desired level -- the Food Corporation has no place to store the excess stocks. In particular, the wheat stocks with the Government agencies have risen to such as extent that Mr. Shanta Kumar now wants to feed the poor with nearly 14 million tonnes of wheat which he can neither store, sell or export.

According to reports, he has already conveyed his proposal to Prime Minister, Mr. Atal Bihari Vajpayee. But the big question is: ``Who will foot the bill for this noble cause at a time when the country's food subsidy bill is already in the region of Rs. 10,000 crores?''

Not long ago, the Government had hiked the prices of foodgrains sold through the PDS, particularly for the above poverty line (APL) sections of population to bring down the subsidy bill. Today the APL off-takes of foodgrains have virtually dried up as th e open market prices in most places are lower than the PDS prices. The problem was further compounded by the new wheat price policy which was announced by the Centre on August 9 this year.

In a sudden move, the Union Consumer Affairs and Public Distribution Ministry decided to scrap its earlier uniform wheat price policy and fixed different prices for the four zones (north, east, west and south). The wheat price for the Southern States was raised to Rs. 743 per quintal against Rs. 650 for their counterparts in the north.

As a result, hundreds of flour mills have stopped lifting their stocks from the FCI godowns which are saddled with huge surplus stocks on account of record procurement of 16.2 million tonnes of wheat during the current season, over and above the carry-fo rward minimum buffer stock of 12 million tonnes, as part of the mandatory food security.

What makes matters worse is that the problem has not developed overnight. Over a period of five years 1995-2000, the excess Central foodgrains stocks over the buffer stock norms have grown by almost 100 per cent. Today some 14 million tonnes of wheat is reportedly lying in the open because the total stocks are far in excess of the storage facilities available with the FCI.

This situation has arisen because of the imprudent hikes in the procurement prices announced by the Government year after year against expert advice.

The height of the policy muddle is the latest proposal mooted by Mr. Shanta Kumar to dole out the excess stocks to the poor. Even if the excess stocks are to be distributed free to the really deserving poor, there are a number of problems such as the cos t of distribution and identifying the poor.

While the first will add to the already bulging food subsidy burden, the second will give birth to new scams. Instead, the Government should utilise the food mountain to fight rural impoverishment, not through doles but through food for work programmes.

The concept is not new and has been tried on limited scales since the last three decades or so. For instance, part of the wages in several drought relief programmes, including Maharashtra's Employment Guarantee Scheme in existence since the 1970s were pa id in the form of foodgrains.

There is, of course, lot of scope to finetune the scheme and provide employment to rural labourers so as to minimise corruption and leakages. After the last year's severe drought situation in several States, schemes have been drawn up for water harvestin g and forestry projects. The surplus foodgrains could be utilised for part-payment to workers engaged on such projects.

Also, there are recurring floods in several States which damage crops and homes of millions of people and the Centre is under obligation to provide relief. A part of such relief could be given in the form of foodgrain stocks available with the FCI.